Prime Minister Binyamin Netanyahu is interested in aiming for a final-status agreement, and not an interim one as some of his ministers are proposing, if and when negotiations with the Palestinian Authority resume, The Jerusalem Post has learned.

In various internal discussions this week, Netanyahu said that were there "courageous leadership" on the Palestinian side, a resumption of negotiations could lead to a final peace agreement, and that this was preferable in his mind to an interim agreement based on a Palestinian state within temporary borders.

In recent days there have been various reports of ministers, and even President Shimon Peres, pressing for an interim accord that would include a Palestinian state with provisional borders. The logic behind this idea is that it would remove from the negotiating mix those core issues that have prevented an agreement in the past - such as the Palestinian refugee issue and Jerusalem - while giving the Palestinians at least something to show for negotiations until those issues could be dealt with at a later date.

Netanyahu, however, has said in private meetings that he thinks a final agreement could be reached, but that it would take courageous leadership taking courageous steps. He said this week that Palestinian Authority President Mahmoud Abbas, who has said he would step down because of the stymied diplomatic process, should not be "counted out."

Netanyahu recalled that in 1971 no one thought that Egyptian President Anwar Sadat would eventually make peace with Israel, and that it was too early to "write off" Abbas. "Sometimes conventional wisdom is wrong," he was quoted as saying.

Sources in the Prime Minister's Office, meanwhile, gave no indication on Thursday that Netanyahu was on the verge of a public statement declaring a 10-month moratorium on housing starts in the settlements in an effort to lure the PA back to the negotiation table. Former MK Yossi Beilin on Wednesday said that such a declaration was in the works, which would be followed by an American announcement that while the moratorium was not everything they hoped for, it was enough to restart the negotiations.

The sources in the Prime Minister's Office said that Netanyahu has made clear in private discussions that he was prepared for a moratorium as long as it did not include Jerusalem and did not preclude construction of public buildings needed for normal life in the settlements. He has not yet, however, specified publicly the length of the proposed moratorium.